The socio‐political, economic, and cultural determinants of social entrepreneurship activity

Purpose The purpose of this paper is to incorporate the demand and supply‐side theories of entrepreneurship development in a series of stage‐based models that analyze how macro‐level and contextual variables influence social entrepreneurship activity. The paper investigates the macro‐level influences, including the socio‐political, cultural and economic factors that can stimulate or impede the emergence of social entrepreneurship. Although little research on these determinants has been conducted, this study seeks to reveal that several variables that are crucial in traditional entrepreneurial studies do not appear to significantly affect social entrepreneurship. Design/methodology/approach To measure social entrepreneurial activity, the authors used the Global Entrepreneurship Monitor (GEM) findings from the 2009 study. Hierarchical multiple regression was used to test three multi‐level stages of the socio‐political, economic, and cultural determinants of social entrepreneurship activity. The series of three stages for all of the variables were entered in the following order: first, socio‐political variables; second, cultural variables; third, economic variables. This approach allows the authors to explore and thus extend the previous research reviewed here, on how the economic context beyond socio‐political and cultural factors affects social enterprise activity. Findings A three‐stage analysis revealed that socio‐political variables accounted for 76 percent of the variance in social entrepreneurial activity. It was found that the single greatest determinant of social entrepreneurial activity is the degree of female participation in the labor force. Additional findings and implications for understanding the role of macro‐level factors on social entrepreneurship are discussed. Originality/value Social entrepreneurship has the potential to confront and address some of society's most challenging and complex problems arising from market and government inadequacies or failures. Social entrepreneurial firms exist within environments that are often severely resource‐constrained. Therefore, social entrepreneurs may rely on a unique set of strategies to mobilize resources available to them, such as collaboration with others and accessing social capital to generate value solutions for their communities. The growth of women's participation in the labor force is a powerful influence on social entrepreneurship activity, and with the increase in training programs and local networks to support women's business ownership, it is likely that this trend will continue and positively impact communities around the world.